Today’s announcement of Dell’s $24 billion LBO has also provided investors with optimism that the emergence of a multibillion dollar debt package could bring today’s technically lopsided market closer to equilibrium and, in turn, put a damper on the surge of repricing activity that has dominated the primary market over the past few weeks.

Expectations are that the new deal, which is being arranged by Bank of America Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets, will include a multibillion dollar covenant-lite term loan execution as well as a large high-yield bond deal. Specifics haven’t emerged, however BAML is expected to have a left lead role on the loan transaction, while Credit Suisse would be left lead on the bond execution. As disclosed, Microsoft will provide an additional $2 billion of debt, while a portion of Dell’s roughly $9 billion of debt, largely bonds, would remain in place.

The buyout deal is subject to a 45-day go-shop period, so few specifics are expected to emerge immediately on the debt financing. However, the expectation of a large new deal may prompt some loan accounts to hold their powder, or even trade out of lower-yielding deals in preparation for the large new investment opportunity.

Loan investors have been reeling in recent days from the repricing push that’s emerged amid a vacuum of true new-issue paper. However, there are signs of fatigue among investors.

Some of the more recent aggressively priced transactions have been hovering around their issue prices: B/B1 Go Daddy’s TLB due 2018 (L+325, 1% LIBOR floor), for example, is wrapped around its par offer price this morning, while B+/B1 IMS Health’s dollar-denominated TLB due 2017 (L+275, 1% floor) was quoted at 100/100.5, versus issuance at par. And Berry Plastics’ $1.4 billion TLD due 2020 (L+250, 1% floor), though not a repricing, was the tightest print for a B/B2 borrower since the credit crisis, has cooled to 99.625/99.875, from issuance at par yesterday.

Dell’s LBO transaction will be financed through a combination of cash and equity contributed by Mr. Dell, cash funded by investment funds affiliated with Silver Lake, cash invested by MSD Capital, L.P., a $2 billion loan from Microsoft, rollover of existing debt, as well as debt financing.

Under the terms of the agreement, Dell stockholders will receive $13.65 in cash for each share of Dell common stock they hold, in a transaction valued at approximately $24.4 billion. The price represents a premium of 25% over Dell’s closing share price of $10.88 on Jan. 11, 2013, the last trading day before rumors of a possible going-private transaction were first published; a premium of roughly 35% over Dell’s enterprise value as of Jan. 11, 2013; and a premium of roughly 37 % over the average closing share price during the previous 90 calendar days ending Jan. 11, 2013. The buyers will acquire for cash all of the outstanding shares of Dell not held by Mr. Dell and certain other members of management.

The transaction is subject to other customary conditions, including receipt of required regulatory approvals, in addition to the Dell stockholder approvals described above. The transaction is expected to close before the end of the second quarter of Dell’s fiscal-year 2014. – Staff reports